COFACE FY-2020 RESULTS: NET INCOME AT €82.9M AND 100% PAY-OUT RATIO
Turnover: €1,451m, down by -0.6% at constant FX and perimeter
- Trade Credit Insurance decreasing by -0.8% at constant scope and FX
- Client retention reaches new record levels. New business increasing to €138m
- Improving pricing conditions confirmed and lower client activity continues
Net loss ratio at 47.7%, up by 2.7 ppts. Annual net combined ratio at 79.8% (84.5% excluding the effect of government schemes)
- Q4-2020 net loss ratio at 18.3% (33.1% excluding government schemes), due to strong management of past
- claims and low level of new claims
- Annual net cost ratio improved by 0.6 ppt to 32.1%, reflecting costs control in the current environment
- Q4-2020 net combined ratio at 58.3% (69.4% excluding government schemes)
Net income (group share) of €82.9m, of which €30.5m in Q4-2020. Annualised RoATE1 of 4.8%
- Earnings per share reached €0.55, down by 43% compared to 2019
Coface continues proactive capital management
- Estimated solvency ratio up at ~205%2 (191% excluding government plans), above the upper end of target range (155% to 175%)
- Proposal to distribute a dividend3 per share of €0.55 representing a 100% pay-out ratio
Changes in governance following the sale by Natixis of 29.5% of Coface’s capital to Arch Capital Group. Bernardo Sanchez Incera, new independent board member, appointed Chairman of the Board of Directors.
Unless otherwise indicated, change comparisons refer to the results as at 31 December 2019.
Nicolas Namias, Coface’s leaving Chairman, declared:
« I am happy that at the time when we sell the majority of our stake in Coface, the company is reporting very good results.
For more than 20 years, Natixis has supported Coface’s development. Today’s publication shows the strength and the good health of the business, at the opening of a new chapter of its history”.
Xavier Durand, Coface’s Chief Executive Officer, commented:
“The past year has been unusual in many ways. While the health crisis and the measures taken to counter it have led to a sharp decline in global economic activity, the coordinated intervention of governments and central banks has helped to limit the extent of the credit crisis. Coface has fully cooperated with governments across the globe in order to support its clients.
In this environment, Coface maintained a high operating performance. Record levels of client retention and the increase in new business have enabled our portfolio to continue to grow. This particularly reflects the adaptability of the group’s employees, whose commitment has made it possible to accompany Coface’s clients through this crisis.
Coface’s balance sheet remains extremely solid, with a solvency ratio of 191% excluding the effect of government schemes. This allows us to propose, during the Shareholders’ Meeting, the distribution of a dividend representing 100% of our net income. It will also enable us to support Coface's clients throughout the economic recovery phase and to seize the opportunities that will arise.
Finally, a little less than a year after the announcement of the transaction, we welcome Arch Capital Group, which is represented on our board by four new directors. The board will now be chaired by Bernardo Sanchez Incera, who has extensive professional experience, particularly in the banking sector.”
1 Return on average tangible equity.
2 This estimated solvency ratio constitutes a preliminary calculation made according to Coface’s interpretation of Solvency II regulations and using the Partial Internal Model.
The result of the definitive calculation may differ from the preliminary calculation. The estimated solvency ratio is not audited.
3 The distribution proposal will be submitted to the Annual General Shareholders' Assembly to be called for the 12 May 2021.
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